65. Early Banking In England

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65. Early Banking In England

The Jews were probably the first bankers in England. They came to the country with William the Conqueror. They knew the use of bills of exchange, and accumulated stocks of coins which they loaned at high rates of interest to the nobility and others upon the security of their estates. When the king and the nobles became so heavily in debt that they could not repay their loans, they repudiated the debts and expelled the Jews from the country.

After the expulsion of the Jews, the Lombards took up the banking business, lending at interest and remitting money by means of bills of exchange. They were allowed to farm the customs as security for their loans. They combined the occupations of goldsmith, pawnbroker and banker. Lombard Street, the "Wall Street" of London, takes its name from them. Mention has been made of how-Edward III defaulted in his payments to some of these Lombardy bankers, driving them into bankruptcy and causing as great distress as any of our modem crises.

The guild of goldsmiths, known as the Goldsmiths' Company, began to act as bankers about the middle of the seventeenth century. They collected rents for customers, and having vaults and strong boxes they received money and valuables for safekeeping. They also received money on deposit upon which they paid interest. A sort of checking system arose by customers giving written orders on their goldsmiths. They loaned out deposits and issued a crude sort of bank note.